How to cut the cost of living crisis down to size

However, Mr Miliband has missed something rather obvious about the cost of living, probably deliberately - in fact, it is something most politicians have missed until very recently when David Cameron started talking about it - and it is this: growth is the problem, not the solution, and by that I mean growth of the wrong kind -growth of the state.

Admittedly, we do know that some of the recent rise in the cost of living is down to the cost of food and fuel, but it is also true that we spend a much smaller percentage of our income on food, clothes and housing than we did 100 years ago. And what, more than anything, has changed in those 100 years? The state. It has become vastly bigger to the point where it is now, by far, our biggest cost and our biggest burden.

And yet, instead of tackling this cost - which is an obvious way to cut the cost of living - we cling to the idea that the economy must grow, usually by two to three per cent per year. And when we don't meet this target, the state intervenes (by printing money or launching help-to-buy mortgage schemes). And when we run into a crisis such as the banking collapse, we increase the size of the state again by nationalising the banks rather than letting them fail and allowing something else to spring up in their place, as inevitably it would.

For generations, particularly in Scotland, no-one has questioned this constant, sometimes fetishistic interference and control by the state, even though the financial burden on us all is now grave. For most of us, our single biggest cost is the state, mostly in the form of taxes, and yet not since Reaganomics in the 1980s has there been serious discussion about fixing this and getting taxes down for ordinary people.

Instead, even as Mr Miliband complains about the cost of living, we appear resigned to accepting the biggest cost of all: tax. This despite the fact that the services our tax pays for are mostly poor value for money. In the case of the NHS, for instance, there is rampant inflation and high levels of waste; in the case of the welfare state, there is increased dependency and increased cost; in the case of the laws on drugs or even saunas in Edinburgh, there is a state system built on offences that are utterly unnecessary (how many billions does the state, and therefore you and I, spend criminalising drug users and prostitutes?).

In his new book Life After The State, the writer and commentator Dominic Frisby suggests a few solutions to this mess and he does it with the scalpel-brain of an economy geek and the sharp tongue of a former standup comedian. The answer, he says, is for the government to stop interfering. The state should be cut, he says, and so should tax, and we should return to the principles of classic liberalism: self-help and helping each other directly rather than through the expensive methods of the state.

His arguments are not only convincing in principle (why should we be coerced to pay for activities we do not support, such as anti-drug laws or large welfare states?), they are also compelling in practice because they deal with some of the objections supporters of a large state are likely to raise. The poor, for example, would not be unsupported because there would still be a welfare state, albeit a smaller one, supported by taxes, albeit lower ones. We would also have more money to help others through charity and, besides, people are more likely to escape poverty in societies which maximise economic freedom rather than restrict it.

And then there is that wonderful benefit for us all, the one Mr Miliband says he is so desperate to achieve: a lower cost of living. A smaller state and lower taxes would give us that, but the problem now is finding a politician to take it on. They all say they want to reduce the deficit and the Coalition Government is tinkering with welfare, but few if any say they want to reduce the size of the state. Who will take on that challenge? Who will cut the state down to size?